In all of the cases, the subject property is taxpayer's
personal residence. In all of the cases except one, taxpayers
purchased the property after July 1, 1995, for an amount less
than the real market value shown on the July 1, 1995, assessment
roll. All of these taxpayers were successful in the Magistrate
Division in establishing that their property's real market value
for the tax year beginning July 1, 1996, was less than the
assessed value for the 1995-96 tax year.

One set of taxpayers, the Schaafs, owned their property
since 1993, but were unaware that its real market value was less
than its assessed value until they refinanced their home. The
refinancing appraisal indicated that the real market value in
1996 was less than the amount shown on the 1995-96 tax roll.
Through evidence submitted at the board of property tax appeals,
the Schaafs established that the real market value of their
property was less in 1996 than was shown on the 1995-96 tax roll.

In short, for the reasons indicated, none of the
taxpayers appealed in 1995 to contest their real market value.
However, all of the taxpayers appealed their July 1, 1997, MAV.
All of the taxpayers contend that they now have a right to prove
that the 1995-96 real market value on the tax roll was excessive
and therefore their MAV for 1997-98 is less.

ISSUE

Does Article XI, section 11 of the Oregon Constitution
permit a taxpayer to challenge the real market value shown on the
tax roll for 1995-96 in contesting the property's MAV for the tax
year beginning July 1, 1997?

"In interpreting a constitutional provision adopted
through the initiative process, our task is to discern
the intent of the voters. The best evidence of the
voters' intent is the text of the provision itself."
Roseburg School Dist. v. City of Roseburg, 316 Or 374,
378, 851 P2d 595 (1993).

2. Under principles enunciated by the Oregon Supreme
Court, this court begins its search for the intent of the people
by considering the text and context of the law. PGE v. Bureau of
Labor and Industries, 317 Or 606, 611, 859 P2d 1143 (1993). If
careful analysis of the text and context does not reveal a clear
intent, the court may then consider legislative history or
historical circumstances. As noted by the Supreme Court in
Coultas v. City of Sutherlin, 318 Or 584, 590, 871 P2d 465
(1994):

"It is an unusual case in which the text and context
of a constitutional provision reflect the intent of the
voters so clearly that no alternative reading of the
provision is possible. Ordinarily, this court will
examine the history of a constitutional provision if
there is a plausible alternative reading presented to the
court." (Footnote omitted.)

3. Article XI, section 11 of the Oregon Constitution was
adopted by the people at a special election held in May 1997.
Section 11 imposes an overall limitation on property taxes by
establishing a MAV for each unit of property and establishing a
permanent tax rate. Two paragraphs, paragraph (a) and (g), of
section 11(1) directly bear upon the issue before the court.
Paragraph (a) of section 11(1) states:

"* * * For the tax year beginning July 1, 1997, each unit
of property in this state shall have a maximum assessed
value for ad valorem property tax purposes that does not
exceed the property's real market value for the tax year
beginning July 1, 1995, reduced by 10 percent."
(Emphasis added.)

This court has recently construed "each unit of
property" to mean each assessable unit of property. Oregon's
property tax system has long provided for separate assessments of
land, improvements, and personal property. Accordingly, the
court has concluded that each category constitutes a "unit of
property" that has its own real market value, assessed value, and
MAV. SeeTaylor and Feltz v. Clackamas County, ____ OTR ____,
____ Tax Court Case No. 4302 (January 13, 1999).

Taxpayers contend that the words "real market value" in
paragraph (a) mean just that, the real market value of the
property, not its assessed value. They point out that assessors'
estimates of value are not the same thing as real market value.
In opposition, Plaintiff and Intervenor contend that paragraph
(a) is referring to the real market value as shown on the tax and
assessment roll as of July 1, 1995. Taxpayers respond that if
the voters had intended or meant the real market value shown on
the roll, they would have so stated. This latter point is not
necessarily true as seen in Cascade Steel Rolling Mills, Inc. v.
Dept. of Rev., 13 OTR 252, 257 (1995), a case cited by taxpayers
in support of their Petition. In that case, this court held that
when the legislature specified "real market value" in
ORS 309.100, it must have intended the assessor's "estimate" of
real market value.

Taxpayers' arguments have facile appeal, but do not
hold up upon close examination. The words "real market value" in
paragraph (a) are immediately followed by the words "for the tax
year." These latter words modify or identify which real market
value is to be used. They appear to refer to the value that was
used for purposes of assessment and taxation. While it is
possible that the voters intended to refer to the property's
actual real market value during the tax year, it is unlikely.
Such an abstract meaning would have no direct relationship with
the property tax system. Trying to force the meaning down that
path leads to a numberless nowhere.

If the court assumes that section 11(1)(a) does not
refer to the real market value shown on the roll, the next
question must be: Where does the number come from? Certainly
section 11 recognizes that property taxes must be administered.
If a MAV is to be established, then the real market value for
every parcel of property as of July 1, 1995, must be ascertained.
There are only a limited number of possibilities: (1) sale of
the subject properties, (2) government appraisals, (3) taxpayer
appraisals, and (4) existing property tax records.

4. By May 1997 when the voters passed Measure 50, they
knew that every parcel of property in Oregon had not sold on
July 1, 1995. It is only slightly less ludicrous to consider
whether the voters intended assessors or taxpayers to assess
every parcel of property. This leaves only one explanation: the
words "real market value" in paragraph (a) were intended to refer
to the amount shown as the real market value on the assessment
and tax roll for July 1, 1995. This view is consistent with the
administrative needs of the property tax system. The assessors
of each county were required to compute a MAV for every parcel of
property. This was feasible only by using the real market value
from the July 1, 1995, assessment and tax roll.

The second paragraph directly bearing upon the issue
before the court, paragraph (g) of section 11(1), states:

"There shall not be a reappraisal of the real market
value used in the tax year beginning July 1, 1995, for
purposes of determining the property's maximum assessed
value under paragraph (a) of this subsection." (Emphasis
added.)

The specific terms used in context are sufficiently
ill-fitted so as to create ambiguities and questions. The word
"reappraisal" does not fit well with the words "real market
value." "Value" is not a usual object of the word "appraisal."
In this context, value is not appraised, property is appraised.
Probably what the voters intended to say is that there shall not
be a reappraisal of the property's real market value.

5. Section 11(1)(g) specifies that the real market value
in question is that which was "used" in the tax year beginning
July 1, 1995. The common, ordinary meaning of the word "used,"
is that it was applied to accomplish something. To be "used in
the tax year beginning July 1, 1995," suggests that the real
market value was employed in some fashion in that year. The most
obvious and common use was the real market value on the
assessment roll. That would be a clear, exact number. It would
also be a number assessors could use to calculate MAV for the
1997-98 tax year.

Whatever the "actual" real market value of each
property was in 1995, only the real market value on the
assessment and tax roll was "used" for that tax year. The value
that taxpayers assert, even though supported by evidence, was not
the value "used" either by them or by the assessor for the 1995-96 tax year.
Consequently, the voters must have intended
the words "real market value" to refer to the real market value
shown on the tax and assessment roll for 1995-96.

6. Because paragraph (g) refers to paragraph (a), the two
paragraphs may be read together for their collective meaning. It
should be apparent that there would be no point in prohibiting a
reappraisal unless property has been previously appraised. To
prohibit a reappraisal is a direction that the prior appraisal
shall not be disturbed or overturned. The only "appraisal" that
would have applied to every parcel of property in Oregon would
have been property tax appraisals. Therefore, the real market
value in paragraph (g) must be the value that was "used" as
described in paragraph (a) "for the tax year." Both paragraphs
contemplate a real market value that was employed in
administering the property tax system for the tax year beginning
July 1, 1995. Any "actual" real market value as contended for by
taxpayers would not have been used or necessarily been "for the
tax year."

Contrary to taxpayers' assertions, the court concludes
that the voters intended to refer to the real market value on the
assessment and tax roll precisely because it did provide
certainty. By the spring of 1997 there would have been few
properties whose real market value was still in question. It is
significant that the voters selected July 1, 1995. That date
became the starting point for all future calculations of MAV and
is significant because section 11 also requires the establishment
of permanent tax rates. Establishing permanent tax rates
suggests the need for certainty in the calculation of those
rates. Allowing property owners to appeal and change the real
market value used for the 1995-96 tax year is inconsistent with
the establishment of permanent tax rates.

Because the concept of MAV in paragraph (a) is unusual
and the phrasing in paragraph (g) raises questions, the court has
considered the legislative history of section 11. As observed in
Taylor and Feltz:

"This section had an unusual beginning. By initiative
Measure 47, adopted at the November 1996 general
election, Oregon voters enacted a constitutional
amendment limiting property taxes. However, after
studying that amendment for the purpose of enacting
conforming and implementing legislation, the legislature
concluded that Measure 47 presented too many legal
questions, unattended consequences, and difficulties. It
therefore drafted a revised Measure 47, and referred the
revised measure to the people as Measure 50. At a
special election in May 1997, the voters adopted Measure
50, thereby repealing Measure 47." Taylor and Feltz,____
OTR ____, ____ Tax Court Case No. 4302 (January 13,
1999).

Measure 47 was a direct limitation on the amount of
property taxes that could be imposed. Measure 50 (section 11)
took a different route to accomplish the same thing. It limited
the assessed value of property and established a permanent tax
rate. The Explanatory Statement furnished by the legislature
that drafted Measure 50 and contained in the Voters' Pamphlet
states:

"Reduces the maximum assessed value of property for
the 1997-1998 tax year to 90 percent of the property's
assessed value for the 1995-1996 tax year." (Emphasis
added.)

7. As of July 1, 1995, ORS 308.232 required property to be
assessed at 100 percent of its real market value. Thus, the
explanation in the Voters' Pamphlet indicating that the MAV would
be reduced to 90 percent of the property's "assessed value" for
the 1995-96 tax year would be understood to refer to the
property's real market value used for that year. More important,
there is no language anywhere in the Voters' Pamphlet that
suggests that the foundation or starting number for calculating
MAV could be appealed or changed.

Taxpayers make other arguments, which the court finds
unpersuasive. They argue that section 11(1)(g) is a restriction
only on the assessor--that the voters would not restrict their own
rights of appeal. Making assumptions about what the voters
intended in these circumstances is mere speculation in the
absence of any language in the constitution addressing appeal
rights.

As noted above, Measure 50 was intended to accomplish
the same thing as Measure 47, which is to limit property taxes.
What the voters may have understood with regard to how the
assessed value of property affects the permanency of the tax rate
is unknown. There is no mention of rights of appeals in section
11 or the Voters' Pamphlet. Consequently, it is just as likely
the voters believed that by using the July 1, 1995, value, less
10 percent, there was no need for anyone to appeal.

The greatest obstacle faced by taxpayers is the
language of section 11(1)(g) itself. The prohibition against
reappraisal is unconditioned and unlimited. It proscribes any
reappraisal. Whether real market value refers to "actual" or
assessed, a reappraisal is prohibited.

Paragraph (g) is clearly intended to prevent going back
in history and revising each property's MAV starting point. To
allow taxpayers to challenge their 1995 real market value would
make paragraph (g) of no effect. By selecting a real market
value as of July 1, 1995, almost two years earlier, the voters
provided a margin of time that, in a general sense, would have
assured a higher value in 1997. By specifying "less 10 percent,"
the voters established an additional margin so that all voters
might feel comfortable that the starting point for calculating
MAV would be at least less than the real market value in 1997.

The court recognizes that in one sense MAV is somewhat
artificial or arbitrary. That is inherent in the overall
scheme of section 11. The concept may, over time, result in
various degrees of nonuniformity in the property tax system.
Section 11(18) contemplates this and excuses itself from
complying with other constitutional provisions requiring
uniformity, specifically Article IX, section 1 and Article I,
section 32.

Having resolved the issue before the court; now,
therefore,

IT IS ORDERED that Plaintiff's and Intervenor's Motion
for Summary Judgment is granted, and

IT IS FURTHER ORDERED that Defendants' Motions for
Summary Judgment are denied. Costs to neither party.

1. Consolidation allowed taxpayers to pool their resources
and employ an experienced attorney who has excellently presented
legal arguments on difficult constitutional questions.

2. "The constitution derives its force and effect from
the people who ratified it and not from the proceedings
of the convention where it was framed * * *." Monaghan
v. School District No. 1, 211 Or 360, 367, 315 P2d 797
(1957).